May Option Investing – FAS Covered Calls Part 2

FAS appears to be another victim of the latest market correction. It hasn’t triggered a sell signal, but I think that buying back my $101 option is a pretty safe bet (currently trading at 0.05/share). I contemplated whether or not to make a quick $50 or so this afternoon by selling an out of the money call. Ultimately, I decided to try to leverage this weekend’s time value by buying back my $101 option (expired this afternoon) and selling a $97 call that expires next Friday (5/19).

Hopefully, FAS doesn’t fall too much more…it is taking a lot of my 2012 profit down with it!